The Diagonal Economy 6: Small Worlds Theory

Small Worlds theory is one method of quantifying and optimizing networks, and is often applied to the optimization of networks in business and economics.  Most people are familiar with the theory because it has produced, among other things, the “hub-and-spoke” design for airline routes.  While small worlds theory has broad applicability in business and social networks, it tends to ignore many factors that influence the actual effectiveness and efficiency of coordination and communication in human networks.  My intent with this post is to propose a theoretical structure for the Diagonal Economy that builds on the small worlds theory of network optimization, but that accounts for the issue of hierarchy to create a flat, non-hierarchal network structure that will facilitate coordination and communication in parallel to our present economic system.

Without regard for hierarchy or span of control, small worlds theory optimizes the shortest path length (e.g. for airlines flights) by heavy reliance on hubs to minimize connections.  However, this theory’s reliance solely on path length optimization fails to account for the information processing burden created at these hubs (e.g. span of control, SNAFU, etc.) nor does it account for the side effects of this necessarily hierarchal structure.  For example, the hub-and-spoke small worlds systems suggested by Watt and Strogatz, among other current small worlds theorists, create excessive dependencies on the hubs in these models.  This creates a network that is neither topologically flat (there are significant dependencies of most nodes on the hub), nor resilient (a breakdown of a hub causes chaos). 

Additionally, the hub-and-spoke models created in traditional small worlds optimization is not compatible with the span of control capability of human nodes in those networks.  Span of control is, essentially, the number of other humans that one human can effectively manage in a hierarchy—a number which tends to settle at about 5.  Where humans are a component of the networks optimized through traditional hub-and-spoke small worlds systems, the information processing burden at the hubs is exacerbated because multiple layers of human hierarchy are required to manage the activities of the hub.

While the math of the standard hub-and-spoke small worlds optimization process is complex (see, e.g. http://en.wikipedia.org/wiki/Watts_and_Strogatz_model), my intuition is that an effort to balance minimization of path length and minimization of information processing burden of hierarchy (and other more subjective side effects of hierarchal structure) will result in a very different optimal network structure than that suggested by the Watts and Strogatz model, and one that will facilitate far superior information processing by any real world process running on such a network. Basically, I’m suggesting that, because the hub-and-spoke model fails to account for the issues of hierarchy (and the associated issue of span of control), it fails to actually optimize the network for human reality (instead forcing upon us a system that squeezes humans into a machine role).  Below, I propose an alternative structure that I think is broadly applicable and that will allow for more efficient coordination and communication in human structures precisely because it is non-hierarchal.

First, one factor that must be considered in formulating this alternative structure is that, while optimization of a network in some theoretical set it may permissible to ignore physical geography, in the Diagonal Economy the demands of production tied to geography (e.g. food, water, energy, family) demand at least some degree of local clustering (as, I think, does our psychology to some degree due to our development in such an environment).

Next, it is necessary when developing such a theory to recognize that, when humans comprise the nodes in such a system, there is a limit to the number of effective connections in which each node can participate (and to avoid span of control issues popping up even in non-hierarchal systems).  The concept in anthropology known as Dunbar’s Number suggests that this number for humans is approximately 150.  The jury is out on whether new technologies (e.g. social networking software) or psychological developments (such as autism – see “Create Your Own Economy” by Tyler Cowen) may be changing that, but for now Dunbar’s Number seems to provide a reasonable guide. 

Next, I think that the effectiveness of people in any system improves when those people are not being squeezed into the role of a cog in a giant hierarchy, but instead are working in a self-directed, self-motivated capacity with peers.  Human creativity, passion, drive, and so many other subjective qualities seem to fare better when self-actualized, rather than acting as an, essentially, an insect.

Finally, variable loyalty or strength of connection is simply a reality in any human-based network, and is something that conventional small-worlds theory ignores.  Even within the 150 links supported by Dunbar’s Number, some will be far stronger than others.  One factor supporting this is the shared connectivity between links (e.g. A links to B and C, but B and C are also linked).  Another factor is geographic proximity, though there are certainly proxies in cyberspace (e.g. shared language).

With all of these factors taken in to account, my theory of an optimal flat network is most simply described from the perspective of a single node:  a number of close, strong, and generally mutually shared links, and a diverse array of medium and distant, weak or strong links.  Here is a simple graphic illustrating this concept:

However, it is how these sets are combined that is critical—and that I have previously stated incorrectly (at least per my current theory).  In the past, I suggested that these sets combine as follows:

The structure portrayed in the above graphic portrays more of a lattice structure, and suggests a pattern of interconnectivity that is too uniform to support either flat network optimization (the distant connections are too uniform and too uniformly close) or to support emergence (which, from observation, only seems to exist in situations with very dense, diverse, and variably distant sets of weak connections).

I’ve hinted at the solution in the past:

But in reality this graphic still relies far too heavily on regular and close connections.  The above graphic implies (incorrectly) that these distant and irregular connections (as shown by the bold black lines in the graphic above) are minor parts of the network and only utilized by occasional nodes--in fact, they are the core of the network and are just as critical as the close connections depicted above.  Additionally, the medium-close connections (as shown by the repeated pattern of four connections to nearby nodes) are excessively standardized.  An optimal configuration would show a far more random and variable set of medium and distant/weak connections.

Here's an example:

Compare that to the same nodes networked in a traditional hub-and-spoke system:

Notice that, in the hub-and-spoke system, one node in each close cluster is in control--it's the "hub," and communication between subordinate nodes through these hubs creates dependency.  While the hub-and-spoke system provides a minimally shorter path in many cases, my theory is that the information processing burden imposed at the hubs, combined with the lack of self-sufficiency and resiliency, makes the hub-and-spoke model inferior to the "rhizome" model of more egalitarian connections.

One clear weakness in this model is that it cannot be objectively and mathematically quantified in the manner of the Watts and Strogatz model.  First, the desire to optimize both path length and multiple human factors simultaneously is antithetical to mathematical analysis (you can only optimize for one thing).  When there are multiple factors to be balanced, there are probably many different effective structures, and the potential for “local peaks” presents a significant challenge (where slight tweaking of a variable degrades the performance of the model, thereby preventing further exploration that would, eventually, identify a superior structure).  There is also the fundamental challenge of conducting controlled experiments or simulations to evaluate highly complex human structures.  Therefore, this theory is necessarily based on an intuitive application of these factors and anecdotal evidence.  As with the development of all human systems, I think optimization of flat human networks, a cornerstone of the Diagonal Economy, is best achieved through the development and fine-tuning of a series of (rough) guiding principles:

1.  (Strong):  Approximately 1/3 geographically (or otherwise) close and strong/loyal connections that share significant interconnectivity among each other.

2.  (Weak):  Approximately 2/3 geographically (or otherwise) distant connections, of variable strength/loyalty that are largely not shared by the above group.

3.  (Self-Aware):  A self-awareness of these principles in the creation and maintenance of connections

4.  (Shared Principles):  Particularly within the context of creating a “diagonal” network that overlaps but exists out of phase with a “large world,” a criteria in creating new connections should also be whether that connection understands and applies this theory in its own connections (which can be accomplished through education and facilitation or discrimination).

That’s pretty simple, but I think largely ignored and potentially revolutionary when applied.  Ultimately, if the Diagonal Economy can develop and latch-on to a superior structure for coordination and communication, it will quickly spread as a means for individuals to maintain and improve quality of life through increased self-sufficiency and resilience despite the troubles besetting hierarchy.

Readers may also find my litigation checklist of interest.

Rhizome is published every Monday morning.  You can subscribe to this blog's RSS feed at:  http://www.jeffvail.net/rss.xml

The Diagonal Economy 5: The Power of Networks

It’s tempting at first to view the Diagonal Economy as fancy gloss on retreat into a more circumscribed social network.  This view, however, fails to capture the power and complexity of two critical but little understood theories of organization that promise to elegance and efficiency to the Diagonal Economy.  The first is really a set of theories and observations often described as “small worlds” theory.  The second is the much more ethereal notion of emergence—almost wholly a mystery to modern science, yet critical (we think) to such functions as consciousness and developmental microbiology.  Combined, these two concepts transform the Diagonal Economy from an inefficient and isolationist form of economic organization to a system that can provide superior coordination of production and information processing than is possible within our modern economy.  In this post, I’ll explore the importance of efficient coordination to the viability of the Diagonal Economy.  In the next two posts, I’ll address small worlds theory and emergence as applied to the Diagonal Economy. 

Simply put, this is the backbone of the Diagonal Economy—the theoretical structure that animates this theory, and that makes it a truly viable and implementable course for our future, as opposed to mere fantasy.  Personally, I find the intersection of the notion of the Diagonal Economy with these animating theories very exciting, which is why I’m devoting a separate post to both small worlds theory and emergence (yes, they are already written, and will appear the next two Mondays, respectively).  While I’ve addressed small worlds theory before, next week’s post will correct significant mistakes in my previous writing and provide a clear methodology and set of guiding principles for optimizing flat small worlds networks to be far more efficient than the currently prevailing small worlds gold standard.  Similarly, the application of emergence to the Diagonal Economy should be intriguing, as it is a field of science that controls phenomena as critical as consciousness and human development, but that we fundamentally don’t understand.

Today, however, my aim is to discuss the importance of efficiency and effectiveness of coordination of production and information processing.  Both of the next two posts, on small worlds optimization and emergence, provide tools to make the Diagonal Economy better at economic coordination and at information processing.  But why do we care about this?  Quite simply, this is what separates the Diagonal Economy from the simplistic alternative of merely going “back to the land” or other isolationist or self-sufficiency theories as alternatives to our current system.  These simpler alternatives fail precisely because they cannot compete with the economic power of hierarchal structures—even accounting for energy descent and other factors that undercut hierarchies.  From food production to manufacturing and knowledge industries, even oppressive and poorly-functioning hierarchies will out-perform isolated self-sufficiency. 

If these isolated nodes of self-sufficiency connect, communicate, and interact, then they will enjoy an improve position relative to hierarchal structures.  Especially in light of the massive challenges facing our civilization in the coming decades, and in light of our desire not merely to survive but to prosper and to build a better world than today, a vibrant alternative will require a superior mode of organization.  It will require a superior mode of coordinating complex economic production, communicating and processing information, of building a creative and elegantly simple culture.  It will need to do this without succumbing to the temptations of hierarchy, especially during times of crisis, by leveraging an organizing structure more powerful and efficient than hierarchy—even more powerful and efficient than current optimizations of hierarchies plus networks, hierarchies plus commons as seen in our current society (note, here, that while civilization has never been a pure hierarchy, our current system of hierarchy plus network is plainly not sufficiently free from the problems of hierarchy to escape the Problem of Growth).

Additionally, from the perspective of the diagonal, the Diagonal Economy will begin as a complementary structure that is coextensive but out of phase with our current system.  However, it will be precisely because it leverages a more efficient information processing structure that it will be able to eventually supplant the substrate hierarchies as the dominant system (which will obviate the causes of the Problem of Growth).

Readers may also find my litigation checklist of interest.

Nuclear energy, hierarchy, and civilizational "pain management"

Back from an extended break on Kaua'i, and back to blogging (new Diagonal Economy post soon).  From the mailbag:

This video on liquid flouride thorium fast breeder reactors was recently sent to me:


Some people think that nuclear energy, particularly fast breeder reactors that ues far less fuel, may be the solution to our energy problems.  I have serious concerns.

I'm generally opposed to nuclear power, though not on the traditional grounds. Initially, I think we'll have fuel and net energy issues if we try to rely on conventional reactors. I'm not yet convinced that a thorough net-energy analysis has been run on breeder reactors, but I'm open to the possibility that they provide sufficient net energy (I'd draw the line at roughly 10:1 after a fully-inclusive accounting of energy inputs). That said, I don't think the technology is mature enough to know this either way at this time (and it's a potential deal-breaker in my view). Also, I'm concerned by the long time of energy payback with nuclear--as with most forms of renewably-generated electricity, a high percentage of the energy input comes up front, but the payback is stretched over the next 30-50 years. That can create a real energy "cash-flow" problem, what I've called the "Renewables Gap" (not that I'd classify nuclear as renewable, but breeders come effectively close to that).

However, it may be possible to overcome all of these issues.  I think we may even be able to find a way to address the many and serious externalities of nuclear power (namely spent fule disposal, proliferation risk, operational risk). What concerns me most about nuclear (all reactor types) is that they are exceedingly centralized and maintain and spawn intensification of hierarchy. I think this the most significant problem because, ultimately, we need to overcome our addiction to perpetual growth if we ever want to be truly sustainable. My theory is that, at its core, we will not solve growth unless we reduce the excess of hierarchy in our civilization.  For that reason, nuclear energy, even the potential of very efficient and "safe" breeder reactors, is like a chronic-pain patient treating their narcotic side effects and rebound pain with new and more powerful narcotics... it may postpone the problem, but ultimately it's making it much, much worse.

(This is actually one of the first topics I wrote about on this blog.  See Energy, Society, and Hierarchy.  The more I think about and learn about our situation, the more I confirm these opinions...)

Readers may also find my litigation checklist of interest.

About Rhizome

My Name is Jeff Vail--I'm an author and attorney in Denver, Colorado.

My writing focuses on the problems facing our civilization as viewed through the lens of the structure and terrain of human interaction.  Specifically:

- The Problem of Growth (the hierarchal nature of our civilization demands growth, and is therefore unsustainable).
- Hierarchy vs. Rhizome:  the inefficiency of hierarchal coordination, and the potential for consciously scale-free, networked self-sufficiency ("Rhizome").
- The New Map: a critique of the notion that Nation-States will continue to dominate our world.
- The Diagonal Economy:  my proposal for transition to a sustainable and fulfilling economic and political structure during the coming (and ongoing) catabolic collapse of our present structure.

I try to apply this theoretical framework to topics where I have specific experience from my current career as an attorney and my previous career as an intelligence officer and counterterrorism analyst:  geopolitics, energy, law, and economics.

Readers may also want to purchase (or download for free) my book, A Theory of Power.  Look for a second book (synthesizing the topics listed above) in the (relatively) near future.  In the meanwhile, I try to post to this blog every Monday morning, and I contribute articles to The Oil Drum about once a month.  Please feel free to contact me via email--I do my best to respond quickly, but I apologize in advance if it takes me a few days.

Sailing off Panarea, Italy:

Rhizome is published every Monday morning.  You can subscribe to this blog's RSS feed at:  http://www.jeffvail.net/rss.xml

Diagonal Economy 4: Compatibility with Human Ontogeny

Humanity evolved into its current biological state in a far less hierarchal social and economic environment.  However, it is important to recognize that our world, our culture, and our economy are not now strictly hierarchal, and have never been strictly non-hierarchal.  Hierarchy is a matter of degrees, and humanity has been surrounded by a shade of gray when it comes to hierarchy.  Manuel de Landa, in his “1000 Years of Non-Linear History,” does an excellent job of illustrating this spectrum—from geology to “primitive tribes” to modern financial systems, there has always been a mix of hierarchal and non-hierarchal structures.  I belabor this point now because, in the past, my arguments have often been criticized as advocating for the impossibility of a purely non-hierarchal system.  That was not, nor is it now, my intent.  Rather, I hope to show that the degree of hierarchy in our current system is problematic for many reasons—here, that it is incompatible with our ontogeny, our evolutionary course of development—and that we will realize many benefits in a system that is less hierarchal.

The core argument—unfinished, but that I’m developing in this post—is that our biological selves will be more compatible with a less hierarchal civilization, and that our civilization will be more sustainable and egalitarian as a result.  How do we know what is best for our biological selves, anyway?  I’m operating here on two theories: 

First, that human civilization is subject to several evolutionary mechanisms, not merely DNA as is commonly thought.  These are:  DNA, our biological “hardware”; our psychological programming that operates on this hardware but that is the product of our upbringing, our environment, and our conscious choices (see Leary’s “imprints” and Robert Anton Wilson’s work on “meta-programming the human bio-computer”); and our cultural programs (both cultural “software” such as religion, morality, political systems and “hardware” such as our geography and built environment).  While I’m quite confident that it’s possible to rapidly breed changes into our DNA (and, in fact, I think this is currently happening due to social stratification and absence of any serious survival challenge in Western societies), I think that approach is too morally dangerous to consider further (though I’m open to opposing views here).  Therefore, I’m operating on the assumption that our DNA is a fixed constraint.

Second, I’m operating on the broad assumption that much of our physiology and brain hardware operates best in environments, and under conditions that are roughly analogous to the environment in which we evolved.  For example, we find more satisfaction in creative problem solving and start-to-finish handcrafting than we do in pushing the same button on an assembly line 8 hours a day; we are able to handle roughly 150 personal relationships fluently (Dunbar’s number), significantly beyond which, or below which we tend towards psychological symptoms of alienation and depression; we respond physiologically better to fire light than fluorescent; etc.

Admittedly, there’s a lot of room to dispute these assumptions an their application, and I have far from offered a rigorous proof of their validity.  I’m not arguing that we must abandon hierarchal institutions because their dissimilarity to the environment of human ontogeny is the sole cause of our impending downfall (though I do think it is a major root cause of the critical Problem of Growth).  Rather, I am arguing that we should at least explore the potential to improve human civilization by modeling our environmental conditions after key elements of our ontogeny.  And that’s where the Diagonal Economy comes in.

First, a quick note on what metric I’m using for measuring quality of life:  optimization of median happiness within a permanently  sustainable framework (in terms of human, not geological or cosmological time scale, aka several thousand years +).  I don’t claim that this is an objectively measureable value, but only that, for now, this is the subjective value I’m keeping in mind when considering the appropriate balance of hierarchal and non-hierarchal systems with relation to human ontogeny.

In one example, our levels of material consumption may be so “sticky,” so difficult to voluntarily abandon even if we are aware of the long-term consequences, because this consumption acts as a coping mechanism for alienation from our ontegeneological environment.  Conversely, reconnection with key ontogeneological features may address the Problem of Growth (that our civilization is structurally biased toward an unsustainable perpetual growth) by making us happier with less.  The distributed economic production that will characterize the Diagonal Economy has the potential—if we consciously make this a goal—to make our networks of personal relationships more aligned with that in our ontogeneological environment.  Similarly, it has the potential to allow all, or at least many more of us to be self-employed, to work on more flexible schedules, to work at more cohesive and fulfilling tasks, etc.  To the extent that these features make us more satisfied with our lives even with less material consumption, it may also allow us to “work” less (less consumption to pay for) and “play” at our hobbies, our families, our communities more, which will act as a positive feedback loop further strengthening our happiness and the cohesiveness of our personal connections.  This feature can certainly be seen in “primitive” societies, and also in many modern but poor societies (e.g. Cuba or rural Brazil) where familial and community bonds remain strong.  However, absent powerful, networked economies and broader awareness of these forces, these examples are easily supplanted by expanding hierarchal systems.  The Diagonal Economy provides the promise of sufficient networked strength to resist such advances of hierarchy, and also to gradually grow within geographic areas currently controlled by hierarchal states.

Finally, and perhaps a bit more “new-age-y,” I intuitively feel that a return to an environment more similar to our ontogeneological environment will facilitate the further evolution of our psychological software—call it spirituality, call it perception or a shift in consciousness, call it the “occult,” whatever label fits, I think it will be very important for the long term trajectory of humanity to move closer, as a group, toward enlightenment because this may be the most effective safeguard against tyranny and unsustainability.  There have always been scattered individuals or small groups that have exhibited this ability, intentionally not defined here, but their minority status and frequent disconnection from economic power and resiliency have prevented a widespread political and economic shift away from growth-oriented hierarchal models and toward truly sustainable and fulfilling societies.  I think that the Diagonal Economy has the potential to combine those traits.  Perhaps it’s not a coincidence that Aldous Huxley’s ultimate novel “Island” is an example of the potential of such widespread spiritual/consciousness advancement, and also the perils of such advancement when disconnected from an economic base (or, as with Pala, when tied to a Cartesian/geographic “state” identity).  In that sense, it may be valid to think of the Diagonal Economy as  Huxley’s “Pala,” but without defined territorial borders and closely integrated to a powerful, networked economic mode of production.

The Blurry (Non-Cartesian) Threat: Maj. Hasan and the Sensory System of the State

One of my favorite books is "Seeing like a State" by James C. Scott.  It chronicles the capabilities, limitations, and propensities of the sensory apparatus of the state.  This, alone, is a fascinating concept, but now it provides a fascinating window into the failure of the Nation-State system to understand what is really happening with a situation like the recent Fort Hood shootings by (allegedly) U.S. Army Major Nidal Hasan.

Our societal sensory system likes to categorize things--probably because it's an aggregation of human sensory systems that function similarly, and because it's an evolutionarily successful strategy (from a media capture standpoint, not human biological survival).  At present, US media is grappling with this question:  was Maj. Hasan a "terrorist," or just "psychotic"?  Of course, this is a false dichotomy, but the reasons why it is false, in my opinion, illuminate a fundamental failing of the Nation-State system that is growing increasingly problematic for its survival.

The media's categories of terrorist vs. psychotic is an attempt to divide an expansive continuum of actors into two neatly distinct sets that resonate with the over-simplified american understanding of global events post-9/11.  Not only is it inaccurate and misleading, but it also highlights fundamental structural weaknesses of our current system as outlined below.

While still a false dichotomy, I think a more useful categorization is to view individual actors' motivations as a mix of influence/control of an outside hierarchy and individual feats of self-organization based on freely dispersed influences (memes, though that term has met with mixed reception).  While the media seems intent on categorizing Hasan either as someone that was acting at the behest of a "radical yemeni cleric" or as someone who "snapped," my categories better capture that all actors represent some mix of self-motivated emergence and strict hierarchical control.

Understanding the continuum of individual actors as emergence of memetic influences:  philosophy, religion, economic circumstances, individual neurochemical feedback-loops.

The false dichotomy resistance--it's just action, and the Nation-State's insistence of framing the issue in terms of enemies and opposition fundamentally fails to understand the problem.

Rose-colored glasses: the security-state's understanding of the challenge posed by the "lone-wolf" threat, and the desire to categorize perceived threats to facilitate the illusion of control (e.g. that they aren't "lone-wolfs").  Because this emergence is not intentionally crafted as an opposition to the state, the state's efforts to fight an "enemy" fail to exert any leverage on the center of gravity of the problem.

Ultimately, the Nation-State lacks understanding and ability at what I've called "Guided Emergence."   Some may suggest that the Nation-State is, in fact, highly competent in this area but is simply hiding its ability to control the masses (i.e. UN black helicopters or Bilderbergers).  I reject this--the Nation-State is neither this monolithic nor this competent.  Instead, evidence suggests that the Nation-State's efforts to fight the symptoms of an emerging global threat are fundamentally misguided.  Of course, as I set forth in my thesis on the future of the Nation-State, the process of guided emergence is antithetical to the constitutional nature of the Nation-State itself, one reason why I see little future for that institution.  Quite the Catch-22.

This phenomenon can be see not only in the current media fixation on salafi jihadism, aka "Islamic Terrorism," but also environmental movements, nationalist movements, etc.  I've even toyed with facilitating the Nation-State's use of the concept of guided emergence in my former job as a counter-terrorism analyst focused on dams and water/electrical infrastructure.  There, I suggested that rather than follow the traditional "interdict/prosecute" model of domestic counter-terrorism, we would be better served by guiding followers of, say, Derrick Jensen, away from the idea that they can achieve their goals by destroying dams and toward the idea that they can best address the fundamental causes they seek to rectify by, for example, pursuing something akin to the Diagonal Economy.  Needless to say, this idea wasn't well received by the Nation-State apparatus.

Can the Nation-State guide emergence of the global threat away from its own centers of gravity?  Can improved public diplomacy solve the problem, or are the demands of the Western Nation-States (e.g. the maintenance of standard of living and relative temporal and geopolitical position via exploitation of the global commons and a global South) simply too antithetical to the concept of guided emergence?  Alternatively (and perhaps diabolically), will the western Nation-States exploit the gene/meme interface via political story-telling (e.g. Ayn Rand), nationalist religions (e.g. an updated take on National Socialism)?  Or will our consciousness itself bifurcate or metastasize in a fundamentally game-changing way as Julian Jaynes suggests happened several thousand years ago?

I'm only beginning to grapple with these issues, but I do feel confident that fluency with the politics/psychology, meme/gene interface will be the core competency in the future struggle between competing political structures (e.g. hierarchy vs. Rhizome, the Diagonal Economy vs. the Market-State).

2009 ASPO Presentation - "The Renewables Gap"

Appologies for the break in posting--the perfect storm of the birth of my second daughter and an extremely busy period at work have forced me to prioritize, and my writing didn't make the cut.  However, I'm cautiously optimistic that I'll be able to get back to posting on a fairly regular (Mondays) schedule.  I plan to dive right back in to where I left off on the "Diagonal Economy" series. 

For now, here are the slides from my recent presentation at the Association for the Study fo Peak Oil conference in Denver, entitled "The Renewables Gap" (.pdf).  If you want to watch the video of the presentation, you can purchase it at the ASPO website.  I've posted a general text of what I said to accompany the slides below:

My talk is about what I’m calling the “Renewables Gap.” The basic question that I’m seeking to evaluate here is whether, and at what cost, it’s possible for our civilization to mitigate peak oil with renewable energy generation—specifically solar PV and wind power.
One important caveat before I get started—My goal is to explore the solution space of our future, not to predict exactly what will happen.

Slide 1:  If we seek to mitigate peak oil with renewable energy, we need to first ask what do we need to mitigate. My answer: the decline in NET energy produced from oil, not the decline in overall production. This graph shows the decline in NET energy available from oil, taken from Dave Murphy’s previous presentation.
If, hypothetically, 20 years from now we’re producing 100 million barrels of oil per day, but it requires 100 million barrels of oil worth of energy input to do so, we have ZERO energy left for the operation of society at large. This is functionally the same as producing no oil at all.

Slide 2:  What I want to quantify is the amount of net-energy that we need to replace going forward. A “classic” peak oil decline graph shows a plateau, followed by a gradually accelerating decline. Let’s consider why that’s so. What happens when we hit a plateau—as we arguably have now? The existing fields are declining at rates between 3% and 15% per year. But, because we’re scrambling to bring new production on-line, the overall level of production is buoyed for some time. We’re compensating for this underlying decline with more expensive oil—both financially and energetically. That keeps the level of OVERALL oil production steady, but the rate of NET energy production from oil is falling. That’s what this graph depicts.
For the purpose of exploring the solution space, let’s pick two numbers to evaluate: 5% and 10% annual rates of decline in NET energy production from oil. I’ll call these the “low” and “high” range scenarios. I’ll be discussing the potential to use renewable wind and solar power to mitigate this decline.

Slide 3:  Specifically, I want to focus on some systemic effects of unique profile of solar and wind energy: the vast majority of the energy invested in these sources comes up front, before they ever begin to generate. Between 80% and 90% of the total energy ever required to build, operate, and maintain these systems must be invested UP FRONT.
I won’t discuss other renewables such as tidal and geothermal power, though their profiles are largely similar. I’ll also ignore biofuels and nuclear—hopefully we’ll have time to discuss these in the question period, but the bottom line is that I think they don’t significantly change the thrust of this presentation.

Slide 4:  Another preliminary issue: these renewables produce ELECTRICITY, not oil. We’re talking here about using them to replace oil—let’s talk about conversion issues. How many GWh are needed to replace 1 mbpd of oil production?
A straight BTU-to-BTU conversion: replacing 1 million barrels of oil per day production, or 365 million barrels of oil per year, equates to 70.78 Giga-Watt-Years. Clearly, however, oil and electricity are not the same thing.
Some people have suggested that you only need 1/3 this much electricity to mitigate peak oil because oil fired electricity generation can be only 33% efficient. I think that modern oil-fired electricity is actually somewhere between 50% and 66% efficient, but we need to explain the validity of using the BTU-to-BTU conversion:
First, because we need to replace oil, not electricity, and because relatively little oil is used to generate electricity, it’s incorrect to use this oil-fired electricity efficiency number.
Second, our infrastructure is currently adapted to burning oil in many applications. Therefore, to the extent we want to use renewably-generated electricity to replace this oil, we need to adapt this oil-burning infrastructure to electricity. For example, if you want to replace transportation fuel with plug-in electric cars, you need to invest in significant new infrastructure in the form of cars, batteries, charging stations, etc.
Third, any form of mitigation using renewably-generated electricity will require significant additional investment in the transmission grid to handle higher loads and to balance or store electricity due to the variable availability of renewable generation.
I don’t know if it’s possible to calculate the exact energy balance here. However, I’ll argue that, in order to mitigate peak oil with renewably-generated electricity, we’ll need to generate effectively the same number of BTUs of electricity as we’re losing in oil. Maybe slightly more, maybe slightly less, but I think the BTU-to-BTU figure of 70.78 Giga-Watt-Years per million barrels of oil per day lost is pretty close.

Slide 5:  Another argument is that we don’t need to produce as much energy renewably as we lose to peak oil because conservation and improved efficiency can largely make up the difference. There’s some truth here, but it’s only ½ the equation. That’s because two factors—population growth and the desire of the world’s poor to improve their standard of living—will cancel out some or all of the gains from efficiency and conservation.
As shown in this graph, if population increases according to various UN estimates, that alone could cancel efficiency and conservation gains of as much as 40%.
Additionally, at least 5 Billion people and growing want to “improve” their level of energy consumption to Western levels. In India, car sales are up 26% over last year, to 120,000 cars per month. Admittedly, these cars tend to be more efficient than in America, but this is new demand, and far more than cancels out the fact that the Tata Nano gets 56 miles per gallon. While markets or force may deny the world’s poor access to Western levels of energy consumption, the geopolitical consequences of such this disparity will only accelerate energy scarcity.

Slide 6:  The key question is: how much up-front energy input will be required to build out enough renewables to mitigate the decline in net energy from oil production? We know how much energy must be produced to meet this target, so the answer to this question is a function of the EROI and the lifespan of our renewable options.
You’ve just heard David Murphy’s excellent presentation on EROEI, which highlighted many of the same issues involved here. What I want to focus on is this concept of boundary.
We could talk about this boundary and EROEI calculation issue until we’re all blue in the face—my intent here is not to argue that some specific number is correct, but rather to point out the uncertainty and potential range. At the lower end of the range, I’ve proposed a proxy of price to account for ALL inputs and outputs. There are significant problems with this methodology, such as dealing with financing costs, but it has the distinct advantage of allowing us to account for all inputs—regressed infinitely—rather than drawing some sort of artificial boundary. IF you look at modern wind turbines using the price proxy, you get something like an EROEI of 4. I’ll call that my “low” value.
Now let’s consider more conventional calculations. Wind seems to be most promising at the moment, and I’m looking specifically at a 2009 paper by Kubiszewski, Cutler, and Endres entitled “Meta-analysis of net energy return for wind power systems.” The authors review 50 different studies of wind EROEI. In a section entitled “Difficulties in calculating EROI,” they make this statement:
“Studies using the input-output analysis [one method of calculating EROEI] have an average EROI of 12 while those using process analysis [another method] an average EROI of 24. Process analysis typically involves a greater degree of subjective decisions by the analyst in regard to system boundaries, and may be prone to the exclusion of certain indirect costs compared to input-output analysis.”
What I take away from that is that there seems to be a range of 12-24, but the authors—a highly respected group—suggest that the “24” figure fails to account for many inputs. That suggests to me that an EROEI of 12 is more accurate.
For our purposes, though, my intent is to explore the solution space, so I’ve selected what I think is an optimistic upper “high” EROI value of 20. I think this is unrealistically high—especially because this figure doesn’t even account for the intermittency, transmission, and storage energy costs that must be considered in such a large-scale societal transition—but for now let’s use 4 and 20.

Slide 7:  How much energy must we invest if we want to ramp up renewable generation to keep pace with declining net energy from oil? This graph answers that question using a 5% net energy decline and a renewable EROEI of 20.

In this scenario, to mitigate the year-1 decline in net energy from oil, we’d need to invest 467 GWy of energy in year one without any production in return—that’s the equivalent of almost 7 million barrels per day. Then in year two it’s about 130 GWy more invested than cumulative production to that point, or about a 2 million barrel per day deficit. Not until year-three will the cumulative renewable generation be more than the investment deficit for that year—meaning that not until year 3 will we begin to have surplus energy available to mitigate the actual decline in oil production (which by this point leaves us 12 million barrels per day behind the peak oil decline curve.
That’s the “Renewables Gap.”

Slide 8:  Here’s the pessimistic quadrant – 10% net energy decline, and a renewables EROI of 4. Here, the up-front energy investment is more than 4,600 Gwyears in year one. That’s 58 million barrels of oil per day diverted to renewable energy production. Plainly impossible. And the level of renewable energy production wouldn’t even catch up to the level of energy invested EACH YEAR until year 7.


Slide 9:  Here you can see the boundaries of the Renewables Gap—the optimistic assumptions on top, pessimistic on the bottom. The lines represent, under each scenario, the net energy supplied by oil, minus the energy invested that year in building renewable energy production, plus the energy produced that year by the renewables brought on-line to date.
To be sure, we can slow the initial rate of investment in renewables in order to lessen this dramatic initial impact, but that option results in falling even further behind the net energy decline curve. We can also bootstrap the energy produced by renewables to provide the energy required for the next round of renewables—if the EROI is 20, this will work to some extent, but it will still have the effect of making us fall even further behind the decline curve. If the EROI is 4, it’s simply unworkable—we never catch up.
Is it theoretically possible to close this gap more quickly? Sure—by investing more energy up front, which actually serves to exacerbate the problem over the short term. We’ll be chasing our tail. It might be possible to catch up—to make a significant public sacrifice up front and kick start the program—IF the economy as a whole is healthy. The Renewables Gap puts us in a Catch-22 situation: using renewables to mitigate peak oil will make the situation worse before it makes it better. Our ability to absorb the up-front costs of transitioning across this gap is a function of our economic health, but to the extent that our economy remains healthy enough to do so we are unlikely to muster the political will to address the problem.
Just to provide some context for the size of this gap: Under the optimistic scenario, this is the equivalent of adding one new China to world oil demand immediately, and maintaining that for many years. Under the pessimistic scenario, this is the equivalent of adding more than 9 new China’s to world oil demand.
Now I recognize that there are energy conversion issues, there are calculation issues, there are timing issues—simply too many variables to make any definitive statements here. But what I hope I’ve highlighted here is this CONCEPT of the Renewables Gap problem, and the uncertainty of our ability to bridge that gap.

Slide 10:  As a civilization, we still have a small and shrinking bank of net-energy surplus with which to build our future. We have to make tough choices about how to spend it. Perhaps our most fundamental choice will be this: do we spend it attempting to bridge the Renewables Gap—despite our uncertain ability to do so? Or, at the risk of using the phrase “Paradigm Shift” in serious conversation, do we cut our losses with the “perpetual growth project” and consider if that energy could be better spent building a fundamentally different future?

I don’t mean to make any secret about my own views here: it seems unlikely to me that we’ll be able to continue “Business as Usual” via massive investment in renewables. It seems sufficiently unlikely that I don’t think it’s the best way to spend our civilization’s limited and shrinking supply of surplus energy. I think that energy will be better invested in the infrastructure needed for communication within and transition to a much more locally-self-sufficient, topologically flat society. I’m not here to tell you that my vision of the future is somehow “right,” or that other visions are “wrong,” but I am here to suggest that ANY vision of the future predicated on a transition to renewable sources of energy to mitigate the decline in oil production must first address this Renewables Gap.

Readers may also find my litigation checklist of interest.

Distributed Manufacturing Contest

Appologies for the slow posting of late--I anticipate more time issues in my life over the the next month or so (ASPO conference this weekend, baby due in two weeks, more "real" work than I can handle at the moment).  That said, the good people at Ponoko were kind enough to offer me a coupon for free use of their system thanks to my article last week mentioning them (I have no financial/other relationship with Ponoko, and as the comments to that post point out, they're just one of many different faces of the coming distributed manufacturing revolution).

So...  since I clearly don't have time to design something at the moment, I'm going to hold my first ever blog contest.  If anyone is interested, I'll offer my Ponoko coupon to the person that comes up with the best "primary goods" design (see last week's article for definition of "primary," but basically I'm looking for something that will increase localized self-sufficiency and resiliency).  All I ask is that the winner send me a picture of the final product that I can post here.  Submissions can come in any format (I don't need the actual file format used by Ponoko for input), and can be posted in the comments or emailed to me.  Deadline is the end of October.

Enjoy...

Distributed Manufacturing Beyond Trinkets

I've spent the last week swamped with work, out of town taking depositions, and preparing my presentation for the upcoming ASPO conference in Denver.  As a result, I haven't been making the hoped-for progress on my Diagonal Economy series.  However, I have been spending some spare time thinking about distributed economies, and specifically distributed manufacturing.  Ponoko seems to be the current leader in this area--they aren't especially distributed yet, but there's certainly promise.  However, as I've wondered before, how much are current distributed manufacturing efforts focused on the creation of "trinkets," and how much promise do they hold to provide what I'll call "primary" goods in the future?

First, two definitions.  "Trinkets"--I'm using this term to describe most everything that seems to be currently available on Ponoko.  Some of them are pretty nifty, but not exactly essential to sustaining our civilization and quality of life in a post-peak energy world.  "Primary" goods are, by this makeshift definition, the opposite of trinkets--things that can play an integral role in our future production of food, water, energy, shelter, communication, materials, etc. 

Now my question to ponder for the week:  Do you think that a system like Ponoko can currently, or will in the future, facilitate the distributed production of primary goods?  Let's take that 1 step beyond a simple yes/no answer--can you describe such a good that can presently be produced via Ponoko?  How about one that could be produced via Ponoko with minor modifications to their system and infrastructure?  My intent is not to promote Ponoko per se, but rather to use its very well defined parameters to facilitate this conversation on distributed production in general.

I'll start:

Primary good that can be presnetly produced via Ponoko:  a bat box.  Sounds simple, admittedly, but it's well suited to the current production capabilities of Ponoko.  Additionally, this qualifies as a "primary good" precisely because, by housing bats in one's yard, it's possible to 1) control insect populations, and 2) accumulate valuable fertilizer from the bats for use in localized food production.  Bee hives and relate systems are another good example, though the need for wire mesh is slightly beyond the current Ponoko capabilities.  Another:  cold frames.  Worm farm.  The list goes on.

Primary good that can be produced via Ponoko with modifications to its capabilities:  A hand pump.  This would probably require the ability to work with metal, in both sheet and tube form.  I recognize that this is well beyond the current capability of Ponoko, but it's not theoretically that big of a change.  Also, if you added the ability to work with sheet metal and pipes/tubing, the universe of potential "primary" goods would open quite quickly (e.g. solar water heaters, stoves, etc.).

Other ideas?  And a related question:  what primary goods are most important for future distributed manufacture (such that we can guide the evolution of distributed manufacturing systems in a direction, rather than hoping the needed capability arises)?

Final thought:  to what extent must distributed manufacturing networks also address local sources and production of the input mateirals?  Distributed wood milling?  Distributed bioplastics production?  Metallurgy?

The Diagonal Economy 3: Growth and Sustainability

I’ve written before about the Problem of Growth.  There, I suggested that our current civilization is structurally unsustainable because an excess of hierarchy requires that it seek perpetual growth.  There, I argued that we must build a non-hierarchal and locally self-sufficient alternative structure that I call Rhizome to replace our current economic and political structure if we are ever to achieve actual sustainability.  Of course, I’ve always recognized that Rhizome is not a practicable mass-transition strategy—it could exist at the peripheries, perhaps even creating a valuable symbiosis with “primary” society, but it’s plainly not realistic to suggest that we just abandon “hierarchy” and adopt “Rhizome.” 

Some readers may have wondered by now about the similarities and differences between the Diagonal Economy and Rhizome—are they the same, am I abandoning my previous theory and replacing it with a new one, etc.?  While there is some overlap, the simplest answer is that the Diagonal Economy and Rhizome are two separate concepts intended for two separate purposes. 

Rhizome was always intended as a theoretical counterposition to hierarchy—its purpose was to explore the problems with our current system by imagining its opposite and attempting to frame it in a way that would be viable.  But it is, in the end, a theoretical model.  I think it can provide useful guidance for people in the unusual position of building something from the ground up—usually very small or remote situations—and while I think it provides much practical guidance in design (as it influenced my development of the Diagonal Economy), it provides little guidance about implementation or transition amidst real-world challenges and constraints.

The Diagonal Economy was created with the express purpose of filling that gap left by Rhizome theory.  I’m less interested in articulating a pristine model for non-hierarchal and sustainable organization than I am in articulating a set of trends and principles that we can all use, at all levels, to guide the continuing evolution and emergence of human civilization.  The Diagonal Economy is expressly intended to adapt the theory developed as “Rhizome” to provide answers and guidance to the challenges that I predict we will face in the coming century.  As such (and as suggested by the title of this post), the Diagonal Economy is intended as a set of guidelines for growing a truly sustainable civilization—specifically, one that has a scale-free absence of the need to grow—within and only eventually replacing the Legacy economic and political structures.

I won’t repeat the argument that I’ve made at length before, but the Problem of Growth is at the core of our civilization’s problems.  Many people suggest that overpopulation is the core problem, but this, too, is but a symptom of our structural problem of growth.  While I think the Diagonal Economy provides many other advantages as a model for transition, most of these are ultimately subsumed under its ability to address the Problem of Growth.  Again, while details of this approach are discussed in the linked articles (and will be covered in more depth later), the keys to addressing the Problem of Growth are scale-free self-sufficiency, non-hierarchal political, economic, and social structures, and an ethic and aesthetic of elegant simplicity.  As I will explain in coming posts, these qualities can be infused into our current structure gradually, rather than attempting some kind of revolution of direct confrontation and sudden replacement.  And this can be done at all levels—not only does it not require action by “others,” but it also does not offer the excuse that we’re waiting on “them.”

In this sense, by attempting to provide a realistic and implementable approach to addressing our civilization’s structural Problem of Growth, the Diagonal Economy may be the only “program” that offers any real hope of achieving true sustainability, not just greenwashing or empty victories.

The Diagonal Economy 2: The Impact of Energy Descent

I’ve wondered how to best explain the advantages of the Diagonal Economy in confronting energy descent.  I think that reference to an old post addressing “anti-economies ” is perhaps the best framework.   There, I discussed the classical sources of economic efficiency:  economy of scale and economy of place.

Both economies of place and scale will be impacted by the phenomenon of energy descent—the idea that there will be increasingly less surplus energy available to society going forward.  While I am very confident that this will be the case, it’s necessary to recognize that there are those who don’t think this will be true—or at least that this won’t be a significant force going forward because we’ll have plenty of energy available from renewable or other sources.  Some even think that technologies like thin-film-solar will make energy “too cheap to meter.”  While I think this is highly unlikely, it’s also important to accept that this is a possibility—to think otherwise (or to think that it’s an inevitability of technological innovation) is an inherently faith-based position. 

I’ve critiqued this “viridian vision” previously here and here .  This post operates on the assumption that society does undergo energy descent, and to the extent that assumption is mistaken then the conclusions reached in this post will be incorrect.  However, even if this assumption is faulty, the general concept of the Diagonal Economy is not necessarily flawed because there are several other forces supporting its adoption that I will address in coming posts.  Now, on to a discussion of the impact of energy descent:

Economy of place, the first of the two classical “economies,” is the concept that some things are more efficiently done in certain places--to use the classic example, it would be just plain silly for to try to grow grapes for Port in dreary England when they grow so nicely in Portugal. Lumber is more ripe for the logging in Oregon than it is in Kansas, etc. 

Of course, when it comes to physical products, economy of place is facilitated by affordability of transportation.  It still made sense to grow grapes in Portugal when the only way to get them to England was via sail.  This effect was less powerful, however, because of the comparatively higher cost of transport via sail (though wind is free, the overall cost of transport by sail was more than modern transport by containerized freighter).  Many items that are transported between continents on a routine basis today were produced locally in the past because of the then higher cost, or slower speed, of transport.  But the oil age, with its cheap and rapid transport options, has fundamentally re-shaped our economy around extreme economies of place.  This will change as oil and other sources of energy for transport (potentially even for the energy for transport of information over the internet) become increasingly expensive.  As economy of scale is less decisive a grantor of fitness in our ongoing economic evolution, we’ll see more localized industry gain on its centralized predecessors.  This won’t necessarily mean a return to the same look and feel of past localization—too much as changed to think we’ll simply revert to the 18^th century.  As the saying goes, history doesn’t repeat itself, but it rhymes.

Economy of scale is the concept that it is more efficient to do lots of one thing rather than trying to do a little of everything. You can specialize and stratify and apply all kinds of economic terminology, but the bottom line is that if all you do all day is draw out wire into pins (to take Smith’s classic example), you're going to get pretty good at it. But if you only had to draw out wire into a pin when you need one (can't remember the last time that happened to me), you will probably be very slow and inefficient in their manufacture. This is economy of scale--and it applies, for obvious reasons, even better to things like microprocessors and flu vaccines than push pins.

As with economy of place, the leverage available through pursuit of economies of scale will change under energy descent.  To some extent, economy of scale is facilitated by cheap transportation fueled by cheap energy.  Of course, economy of scale also facilitates specialization, which can lead to economies of production under certain circumstances.  While not strictly a prerequisite to reaping economies of scale, centralization is a common symptom of such efforts.  It’s possible to leverage distributed networks of highly specialized functions to achieve economies of scale (something especially compatible with the Diagonal Economy, and that I will cover later), but this is not yet commonplace.  As a result, economies of scale tend to require cheap energy for transportation to meet three needs:  1) to get workers to a physically centralized location where they can perform specialized tasks, 2) to transport physical goods to this specialized location, and 3) to redistribute the resulting physical product to its end user.   It’s also worth addressing one more symptom of economies of scale:  the information-processing burden of hierarchy, or what Robert Anton Wilson called the SNAFU principle.  Economies of scale are usually (though, importantly, not necessarily) the result of hierarchal structures—corporations, governments, religions, etc.  Because control (both of process and output) is often a requirement of those who design such institutions,  hierarchal structure is a necessity.  However, with such hierarchal structure comes an increased information-processing burden as the top must communicate through several relays to the bottom, and vice versa.  This tendency, while individually important, is relevant here because it can exacerbate the importance of cheap energy/cheap transportation to economies of scale because hierarchies tend to require more people—and hence greater centralization and more transportation to and from—as a result of this information-processing burden.  The truism that hierarchy tends to result from a need or desire for control—of inputs, outputs, process, etc.—also suggest that hierarchies can be avoided by forfeiting control over these parts of an economic process.

Like economies of place, the result of energy descent will be that economies of scale provide less comparative advantage than it did in the past.  This will be particularly true where economies of scale require physical centralization and where it depends on hierarchal control structures.  Therefore, as a result of energy descent, we’ll see two trends:  away from physical centralization, and away from hierarchal control structures.  Here in particular, because of both available communications technology and the conscious understanding of modern communication possibilities like P2P and open-source, the future will not be a simple reversion to the past.  Instead, there will be great comparative opportunity to structures that develop a way to leverage economies of scale without depending on physical centralization or hierarchy.  The Diagonal Economy is specifically conceived with this possibility in mind—open-source information processing, the development of platform-based manufacturing, and other concepts that I will discuss in more detail later.

I think it might be useful to envision the spectrum of economic possibilities along two axes:  degree of hierarchy and degree of physical centralization.  The result of the declining importance of economy of place and economy of scale presents a potential bifurcation point on the resulting graph of our future economic path(s).  If you accept that, on one axis, the scale and centralization of our economy will recede due to energy descent, then I argue that the variable axis is the degree of hierarchy within our economy. 

Less centralization and scale but more hierarchy than present looks like a form of neo-feudalism to me.  I certainly don’t mean that this will be a regression to jousting and castles, but rather that we’ll see an increasing disparity in standard of living among an increasingly stratified local political and economic structure.  For matters of ontogeny and optimizing the median standard of living, this is the less desirable option.  However, as this option may prove the best option (both in absolutes and comparatively) for current elites, I would not be surprised if there is a significant push in this general direction.  I think that, absent active pursuit of the alternative outlined below, the natural tendency under energy descent will be for our current structure to “erode” into some kind of a neo-feudalism with less centralization but more hierarchal stratification.

The alternative—less centralization, less scale, and less hierarchy—is what I envision as the Diagonal Economy.  This is my preferred vision of the future, but not one in which I am especially confident.  While I think this option will be the most effective in maximizing the absolute median standard of living in an environment of energy descent, it will be a challenge to implement because, as I just pointed out, there will be little incentive for existing elites to choose this path.

Finally, the third option of less centralization and scale but about the same amount of hierarchy seems unlikely.  This option is the analog to the viridian vision of the future as a land of renewable plenty!  Considering that this framework accepts declining surplus energy due to energy descent, the existing economic structure will simply be untenable.  As pointed out above in the discussions of economies of place and scale, if energy for transportation is less available then we must reduce centralization.  Existing levels of hierarchy that made sense under existing levels of centralization will no longer be tenable—the overall economic product per person available will decline along side energy, requiring either more hierarchy to enforce a greater stratification or no providing enough economic incentive to those at the top of the hierarchy to justify its costs.  While I have argued that a flatter structure with much less information processing burden may also provide high quality of life to its constituents, it does so specifically because of the avoided cost of hierarchy.  Instead of the status quo, then, It is my guess that we will either see an intensified but localized hierarchy (neo-feudalism) or a dissipation of hierarchy itself (the Diagonal Economy).  Finally, for those who do not actively pursue the Diagonal Economy option, the existing political and economic terrain will all but mandate a neo-feudal future.

Tainter on Complexity and Sustainability

Joseph Tainter has published a new essay at The Oil Drum, a definite must read.  For those who are unfamiliar, Tainter's "Collapse of Complex Societies" is, in my opinion, one of the most important books available to explain the structural nature of our current predicament.  His new essay is not just a rehash of his previous work--it explores a new theory with startling implications.  In short, it turns common perceptions of sustainabilty on their heads. 

I think Tainter's thinking highlights the need for a specific type of solution that I have attempted to articulate in the past:  elegant simplicity, designed tecnics, vernacular zen, etc.  My problem is that I have not had a suitable framework to give structure to my ramblings.  Tainter's latest essay provides that structure--after I finish the Diagonal Economy series, I will turn to re-articulating these previous works as a solution specifically intended to address the issues raised by Prof. Tainter.

On the Diagonal Economy series, my work schedule has kept me from getting it published as quickly as I would like.  I have completed the next installment, and hope to finish up a few more this weekend, ensuring that the next few weeks will be a return to substantive postings...

Directionality of Hierarchal System Evolution

Too busy to write anything new on the Diagonal Economy at the moment.  I am, however, having an interesting email exchange with a friend who is currently deployed to Iraq and is tasked with shoring up their hopelessly over-extended intelligence databases.  We've been discussing how to "fix" the problem, with me (predictably) recommending adopting a flatter, decentralized information processing system that removes the analyst from the loop and uses some form of blog ecosystem to unify operator and analyst into a single position.  While I never really expected this to be an implementable solution, over the course of the conversation it became increasingly clear to me that hierarchal structures can't "go back"--they can't easily and selectively implement decentralized, p2p approaches to information processing because to do so effectively would be fundamentally antithetical to their constitutional form.  A short excerpt:

The more I think about the issue, the more it seems that there's just a fundamental directionality of hierarchal systems such as the military.  It's not possible to move away from the centralized analysis model to a decentralized model because that would lead to a landslide of decentralization, and the whole structure would break down.  The "blogging intel ecosystem" works best when it's done exactly the way the "enemy" conducts business (US cathedral v. "enemy's" bazar):  it's unclassified, anyone can participate, and often your very funding and operational capability depend on not only your participation but your success in that ecosystem.  If analysts were paid only by the number of hits and links their intelink blogs received (e.g. their google ranking, for lack of a better term), then suddenly you'd have an amazingly well populated and up-to-date system (side note:  the current system is so bad that most intelipedia pages are still largely the same as when they were cut and pasted from wikipedia in the first place!).  For example, if the US military stopped paying people, and instead paid for operational success in some kind of market-system, and if the US military abandoned all rank/hierarchal structure and let people organize in whatever way worked best to get their piece of the pie (payment for operational success), then there would be real value in open and decentralized reporting and analysis being conducted by the very people who are also using that information to operate.  Of course, anything structured like that would never have gotten itself into the royal mess we're now in...

More to the point, minus the mumbo-jumbo, and my conclusion is that this entire set of solutions that I'm hinting at is fundamentally unavailable to the military because of its structure.  For the concept to work as a solution, the military would need to abandon its structure to such an extent that it would no longer be in need of the solution.  And this structure is also the source of the original problem.  

In all honesty, do you think that this problem will ever get better?  Which is more likely to happen:  1) "they" add another 300,000 hours of predator video first to your analytical load without considering the consequences to your processing/exploitation/dissemination system, or 2) "they" conduct a top-down re-evaluation (complete with the budgetary authority to make real changes) of how their system functions and begin to collect data with the efficiency of the overall process in mind.  What you're grappling with is a symptom of a structural problem that will only continue to get worse, not better, until the structure is addressed.  While I have no doubt that you'll be able to improve the system to some degree, that will work in a way like Jeavons' paradox, and make the overall situation worse:  by improving system capacity by some amount, the immediate need to address the underlying structural problem will recede and you'll get 500,000 hours more predator video, not 300,000 hours, because now you can handle it.  Which, of course, will only get you back into the same jam you're currently in, but with more invested in a flawed structure and less elasticity of that structure to respond to future demands because you've picked the low-hanging fruit improvements already...

Begs the question:  to what extent is this unique to Nation-State military structure, or, as suggested by Tainter and others, is it impossible to voluntarily contract the scale and scope of hierarchy, leaving collapse as the only possibility?

On a semi-Diagonal Economy-related note, does this support the argument that we must focus on building diagonal structures rather than adapting existing, hierarchal institutions, or is that overreaching?

Diagonal Economy 1: Overview

I often have a difficult time articulating my vision of the future.  Some people think that I’m a “doom and gloom” type—that there will be small, fortified islands of farming communities trying to fend off the starving masses after civilization collapses due to energy shortages.  Others, of course, think that I’m either hopelessly optimistic or a hopeless romantic, and that I’m suggesting we can replace modern society wholesale with some fantasy-world of cooperative networks of suburban homesteads.  While I understand how these misperceptions have come about, I haven’t done a very good job (yet) of articulating how I do, in fact, see the future of civilization unfolding.  That’s my hope for this Diagonal Economy series:  to outline the major forces and systems driving the evolution of our civilization and economy, including in-depth analysis of major forces and thoughts on how we can help, or gain from, the resulting trends.  This first post in this series will provide an overview of my vision of the Diagonal Economy--you can keep track of the larger series at the Table of Contents .

This civilizational and economic evolution will, under my theory, give rise to what I’m calling the “Diagonal Economy.”  I initially planned to use the phrase “Parallel Economy,” but that sounds too much like a mere shift to black and gray markets, instead of addressing the more fundamental, structural shift that I predict away from hierarchal organization to a flatter, peer-to-peer form of organization that I have called “Rhizome ” elsewhere.  Perhaps “envision” is a better word than "predict"—I advocate for this shift, and think that it makes sense from several perspectives (fulfilled ontogeny and true sustainability in particular), but what I am not doing is suggesting, like some Marxist prophecy, that this shift is somehow our civilization’s destiny.  I think this shift will occur on some level, but that it will meet powerful resistance.  In the end, it is primarily a set of tools that will become increasingly available to those who wish to shape their own future.

Here, I think that “diagonal” best captures this shift—movement along one axis (energy consumed and scale) and along a second (degree of hierarchal order of organization).  The term also draws from a discussion (using the same label) in the Intermezzo section of Antonio Negri’s and Michael Hardt’s “Empire.”

So what is the Diagonal Economy?  Ultimately, I see it as a structural response to the various forces that will increasingly shape the coming century and beyond.  A limited list includes energy descent; other resource constraints; imminent ecological and climatic pressures; the limits of human ontogeny; information processing burdens; and the breakdown of the nation-state system.  I use the term “structural” quite a bit, yet I rarely define what I mean by it.  Each of these forces, for reasons that I will explore in individual posts in this series, have particular impacts on hierarchal structures.  Likewise, each force interacts differently with what I’ve called “Rhizome ” --topologically flatter, peer-to-peer networked structures that exhibit scale-free self-sufficiency.  While I don’t suggest that we will—or could—abandon hierarchy entirely in favor of rhizome, I do think that each of these forces will more negatively affect hierarchal patterns of organization than they will affect rhizomatic patters.  For that reason, while I actually predict a reactionary response by hierarchy, when confronted by these patterns, to enhance the hierarchal nature of existing structures, I think that there will be the opportunity to instead confront these forces with increasingly rhizomatic solutions.  So, in that sense, the Diagonal Economy is my proposed solution to humanity’s current and dawning challenges.

That may work as a statement for the intent of this notion of “Diagonal Economy,” but it isn’t much of a description.  I hesitate to articulate a vision for the Diagonal Economy, not because I’m worried about being proven wrong (I’m quite confident that will happen often enough), but because I don’t want to limit the modes of expression of the basic principles that I will articulate.  That said, I think it’s worth describing one possible manifestation:

The diagonal economy might rise amidst the decline of our current system—the “Legacy System.”  Using America as an example (but certainly translatable to other regions and cultures), more and more people will gradually realize that there the “plausible promise” once offered by the American nation-state is no longer plausible.  A decent education and the willingness to work 40 hours a week will no longer provide the “Leave it to Beaver” quid pro quo of a comfortable suburban existence and a secure future for one's children.  As a result, our collective willingness to agree to the conditions set by this Legacy System (willing participation in the system in exchange for this once "plausible promise") will wane.  Pioneers—and this is certainly already happening—will reject these conditions in favor of a form of networked civilizational entrepreneurship.  While this is initially composed of professionals, independent sales people, internet-businesses, and a few market gardeners, it will gradually transition to take on a decidedly “third world” flavor of local self-sufficiency and import-replacement (leveraging developments in distributed, open-source, and peer-to-peer manufacturing) in the face of growing ecological and resource pressures.  People will, to varying degrees, recognize that they cannot rely on the cradle-to-cradle promise of lifetime employment by their nation state.  Instead, they will realize that they are all entrepreneurs in at least three—and possibly many more—separate enterprises:  one’s personal brand in interaction with the Legacy System (e.g. your conventional job), one’s localized self-sufficiency business (ranging from a back yard tomato plant to suburban homesteads and garage workshops), and one’s community entrepreneurship and network development.  As the constitutional basis of our already illusory Nation-State system (.pdf) erode further, the focus on #2 (localized self-sufficiency) and #3 (community/networking) will gradually spread and increase in importance, though it may take much more than my lifetime to see them rise to general prominence in replacement of the Nation-State system.  Ultimately, the conceptual “map” of the American Nation-State will re-open, and those pockets that best develop a Diagonal Economy to fill that gap will enjoy the most success in what will otherwise be a time of substantial—though I think largely subconscious—transition.

That might be unsatisfactory as a description of the Diagonal Economy in action—I’m happy to elaborate in comments.  In upcoming posts, I will articulate this vision in more detail by focusing on component forces and phenomena within this shift to the Diagonal Economy.  Hopefully a coherent picture will emerge, and a set of principles and tools will be clearly defined.  But, if this vision is only clear in my own head, please let me know.  My goal here is to figure out how to translate something that is half intuition and half foggy notions into a comprehensible essay . . .

Readers may also find my litigation checklist of interest.

Simplicity, Resiliency, and Artifacts

I won't begin the promised "Diagonal Economy" series quite yet.  The main reason is that I don't want to start down that path without putting full effort into it.  So, in the interim, I've wanted to write a bit about lifestyle design and philosophy.  While this may seem like a major departure from my general themes, I think it's actually complementary:  by approaching our individual and community patterns as something to be consciously designed, rather than merely followed, we have the opportunity to make our lives more resilient, more energy efficient, more environmentally sustainable, and more pleasurable.  That can't be all bad?

First, two blog recommendations on this topic:

Tim Ferriss, author of The Four Hour Work Week.  This has been on my sidebar for some time.  Superficially, his book is about figuring out how to make quick money off the internet and then take long vacations.  At its core, however, he is working to design a set of tools and principles for living that can be used to adapt to rapid change, build a more resilient lifestyle, become healthier, solve problems--a host of useful things.

Leo Babauta, and his blog Zen Habits.  Leo has build a very successful career for himself by applying one simple principle:  examine and simplify everything you do.  Will be added to my sidebar soon (along with several other blogs I've been meaning to add for some time).

While it's relatively easy to dismiss these two as self-help gurus, I think they offer something more.  More than the actual tips they offer, they serve as examples of the kind of lifestyle and process design that I think will be increasingly important (at least if individuals or communities want to succeed) in a post-peak oil, post-Nation-State, post-caretaker-economy world.

The notion that we should look at everything we do, deconstruct it, and design it to better meet our needs, is one that will become increasingly important as old assumptions no longer remain valid.  A complement to this is the notion that we should simplify as much as possible.  While it's not exactly sexy advice, the continuous application of these two principles will serve us well in the coming years--no matter what they hold.

Personally, my life is far from simple.  I'm not sure my life is really any more complex than most people--kid(s), demanding job, interests and hobbies, etc.--but I know these principles have been useful to me.  I'm healthier, fitter, better informed, more successful, and happier as a result, and I still have a long, long ways to go.

So, take a moment and check out the two links above if you're so inclined.  But, if they don't immediately appeal to you, perhaps because you initially find them irrelevant to the reason you read this blog, as an exercise try to figure out how they offer tools that ARE helpful to the reasons you are reading this right now.  Perhaps in future posts I'll get into the details ("diagonal lifestyle design"?), but I think readers will find these ideas readily applicable to issues of energy, geopolitics, and societal transition.

EROEI Uncertainty

No new post on the Diagonal Economy--I've been working on re-writing this post, on EROEI Uncertainty , for publication today at The Oil Drum.  Should be controversial...

Back to the Diagonal Economy series next week.